Our financial system is crumbling this week.

[Arthur Dent]

I generally think tax cuts are the way to go, because they tend to be fairer and much quicker than the federal government picking regions and/or industries to receive the benefit of spending.

Also, far less effective, especially in the current context of large scale indebtedness and wealth loss. I think Obama is right to reject exclusive use of the Republicans' universal economic policy proposal which has clearly failed to deliver the promised results. Anyway, it's not automatically true that government spending will be badly allocated compared to allocation by private markets. We just witnessed private markets plow trillions of dollars into housing at bubble inflated prices. I think we may be witnessing the end of neoliberal marketism, and it would be best if we recognized it sooner rather than later.

[Leroy]

Irish government faces growing fears of debt default

Fears are growing that Ireland could default on its national debt after the cost to insure against possible losses on loans to the country rose to record highs at the end of last week.

Credit ratings agency Moody's recently followed rival Standard & Poor's in warning it might downgrade Irish debt, amid fears that one of Europe's former success stories is falling into a deepening recession. The cost to hedge against losses on Irish debt tripled last week to a record 355 basis points - meaning that for every £100 of debt, investors have to pay £3.55 to insure against default, according to data firm CMA Datavision. It was about 262 basis points at the end of January.

Moody's has warned there is a more than 50% chance Ireland will lose its triple A rating within 12 to 18 months.

The spread between Irish and German debt rose last week to 203 points, meaning Ireland has to pay 2% more interest than Germany to borrow in the financial markets because of its perceived higher risk.

Ireland last week announced an additional €7bn (£6.3bn) injection into its top banks, Bank of Ireland and Allied Irish Banks, which are suffering from an increase in bad loans. Thousands of Irish citizens are struggling to pay their mortgages which they arranged at the peak of the country's real estate bubble. Unemployment is at a 15-year high.

The IMF tried to calm investors by saying the country, once known as the Celtic Tiger because of its economic growth, did not need any financing from it.

[maddash]

So with the Ireland thing, when they say they'll default on their national debt, does that basically mean whatever their version of treasury bonds are, that they'll become worthless?

[dangerous]

http://seekingalpha.com/article/120789- ... -graveyard

[AdmiralKird]

So with the Ireland thing, when they say they'll default on their national debt, does that basically mean whatever their version of treasury bonds are, that they'll become worthless?

I believe they'd levy higher taxes before they defaulted on their bonds. Even if they fell to Aa instead of Aaa that's still not terrible. They'd just be going from virtually risk free to very light amounts of risk.

This news source is just spinning to make it look like Ireland is going to default in the near future, when they wouldn't even lose their AAA rating for another year, and we'll be out of this recession in about 3 years max.

[Hungary Jack]

So with the Ireland thing, when they say they'll default on their national debt, does that basically mean whatever their version of treasury bonds are, that they'll become worthless?

Worth less, but not necessarily worthless. The government may declare default, and then try to work out some sort of payment schedule where bondholders receive a fraction of the face amount.

[Freed Roger]

any guesses/rumors on next big retailers to fail?

I'm thinking one of the big office supply stores will go away, and one of the big-box hardware stores. I don't know how the office stores by my house have stayed open this long - big space/large overhead and nobody ever in them.

and damn - the market is heading deeper south. unbelievable.

Edit - one thing that could help the hardware stores is this credit for purchases to make homes more energy efficient. One place I read that its 30% credit, so in effect your furnace, windows etc could be bought at a 30% discount - but nobody knows for sure so they can't proceed.

If the govt wants the stimulus to start working in that area -they should work out the details/limitations on that credit and make it public knowledge - let people know What sort of work is eligible, When it takes effect, How much credit, and if there are any gotchas such as if you have too high taxpayer income to get credit and Alt Min Tax limitations.

Personally, the Freeds are in the process of getting windows put in - and it would be nice to know if they qualify. I suspect that once the credit gets out there if its 30%, more people will start buying and eventually the prices of buying/ installing will go up.

[Popeye_Card]

A bunch of clothing retailers are in trouble (Eddie Bauer, Lane Bryant, Timberland, etc.). I think the big box hardware stores will be ok, because I think most of their business comes from home improvement/maintenance rather than new construction. But I could be wrong.

Sears/K-Mart likely won't last the year.

I don't see how a lot of huge chains can stay afloat. Maybe something good (IMO) will come out of this in regards to a return to smaller, local businesses.

[Jocephus]

trump casinos is filing for chapter 11!!!!!

[Leroy]

HOUSTON (Reuters) - Federal agents entered the Houston office of Stanford Financial Group on Tuesday, according to a Reuters eyewitness on the scene.

About 15 people, some wearing jackets identifying them as U.S. marshals, entered the lobby of Stanford's office in the Houston Galleria area, the eyewitness said.

Houston-based Stanford Financial Group, which says it oversees more than $50 billion of assets, is being investigated by U.S. regulators, according to a person familiar with the matter.

The New York Times reported that U.S. securities regulators had accused three top Stanford executives, including Robert Allen Stanford, of fraud.

The Houston office of the U.S. Marshals Service had no immediate comment. A Stanford spokesman was not immediately available to comment.